Scottish Mortgage’s SpaceX Windfall Triggers a Sell-Off, a Buyback Blitz and a High-Stakes AGM

Scottish Mortgage Investment Trust saw its shares drop 5% after SpaceX's IPO as investors cashed out, prompting a strategic shift to NAV-based buybacks and a vote on raising private-asset limits.

Scottish Mortgage Investment Trust is facing an unusual headache: its biggest bet just hit the public market with a bang, but the celebration was short-lived. When SpaceX made its stock market debut on 12 June, the rocket company’s shares soared 19% and its market capitalisation punched past $2 trillion. The Edinburgh-based trust, which holds a SpaceX stake worth more than $4 billion — over a fifth of its entire portfolio — should have been cheering. Instead, its own shares slid roughly 5% as investors who had used the fund as a proxy for Elon Musk’s space venture cashed out en masse, amplified by a soft tech sector.

The sell-off has forced management to accelerate a strategic pivot. On 16 June, the trust bought back 2.325 million of its own shares in a single trading session at an average price of around 1,486 pence — double the volume of the previous day. That burst of buying marks a clean break from the past. Going forward, Scottish Mortgage will only repurchase stock when the price falls below net asset value (NAV). The old, more generous support policy is scrapped. Shareholders will vote on the new rule at the 2 July annual general meeting, which also caps buybacks at 15% of total shares under the NAV-based trigger.

The scale of the buyback programme has already been enormous. Over the past two financial years, the trust bought back roughly 307 million shares, equivalent to 22% of the then-outstanding float. Yet the real prize — and the reason behind the current pressure — remains the SpaceX holding. Fund manager Tom Slater has signalled he intends to keep the position long term, but the trust’s hands are partly tied by an unusual staggered lock-up structure. Instead of the typical 180-day ban on selling, SpaceX shares will be released in tranches: up to 20% after the second-quarter earnings report, an additional 10% if the stock trades at least 30% above the IPO price, then five steps of 7% each, followed by 28% after the third-quarter numbers. Musk himself is locked up for 366 days.

The lock-up schedule matters because Scottish Mortgage’s own shares are trading at a discount to NAV, and the buyback policy is designed to narrow that gap. At the AGM, the board is also seeking approval to raise the ceiling on unlisted investments from the current 30% of total assets. Private holdings already exceed 40% — SpaceX alone accounts for 21% — so the vote would effectively legitimise an existing reality. The trust’s next big private-market hope is Anthropic, an artificial-intelligence company that makes up nearly 3% of the portfolio. After a recent funding round, Anthropic was valued at $900 billion and has filed paperwork for an IPO that traders expect to land at a $1.5 trillion valuation.

The environment for private growth companies remains challenging. Financing costs stay high, and between late 2025 and early 2026 the volume of tech deals collapsed by 70%. That risk is baked into the AGM ballot. If shareholders approve the higher private-asset limit, the trust will cement its aggressive focus on pre-IPO bets — a strategy that has already produced a 25% year-to-date gain in the stock, which now trades at €17.07. Still, the share price is about 12% below its May record high. The more conservative measure from a different session put the stock at €16.84, with a year-to-date rise of 21% and a 44% recovery from the 52-week low last November. The gap between the two figures illustrates the volatility that comes with a portfolio dominated by a single unlisted behemoth.

The 2 July vote will decide whether Scottish Mortgage tightens its buyback discipline while simultaneously loosening its leash on private-market exposure. For a trust that already holds more than two-fifths of its assets in unquoted names, the outcome will set the tone for the next chapter of a story that began with a £151 million stake now worth nearly $5 billion.